Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
Demand for sugar will decrease
B
Demand for sugar will increase
C
Demand for sugar will remain unchanged
D
Sugar will become a substitute for coffee
Understanding the Answer
Let's break down why this is correct
Answer
When the price of coffee goes up, many people will buy less coffee because it costs more. Since coffee and sugar are complementary goods, this means they are often used together. If people buy less coffee, they will also need less sugar because they usually use sugar to sweeten their coffee. For example, if someone usually drinks two cups of coffee with sugar every day but now decides to cut back to one cup due to the higher price, they will also reduce the amount of sugar they buy. Therefore, the demand for sugar is likely to decrease as the price of coffee increases.
Detailed Explanation
When coffee costs more, people buy less coffee. Other options are incorrect because Some might think that if coffee is more expensive, people will buy more sugar to enjoy it more; It's a common mistake to think that the demand for sugar won't change.
Key Concepts
Cross-Price Elasticity of Demand
Complementary Goods
Market Behavior
Topic
Cross-Price Elasticity of Demand
Difficulty
medium level question
Cognitive Level
understand
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